High paper prices look set to stay

“Ridiculously” high paper prices look set to stay according to industry experts, squeezing the margins of paper mills.

According to MRW prices, news and pams are currently trading around the £110-115 per tonne mark with some in the industry reporting prices of £120 per tonne. The price of cardboard per tonne is around £115-125. According to industry figures this does not look set to change until April or May this year.

Aylesford Newsprint owns a paper mill in Kent. Head of recycling Andrew Perkins said: “The price of recovered news and pams on the spot market plateaued around £110 to £120 ex-works at the end of 2010, which, while very high, at least is a more stable position than was the case for most of 2010.”

Merchants have also spoken of their hope that prices do not rise further as the mills will not be able to afford the paper.

Cardboard recycler Mark Lyndon Recycling predicts that 2011 will be an extremely volatile year for paper prices. Commercial director Paul Briggs said: “We’re going to see the highest prices for paper and the lowest prices for paper this year.

“I think they have reached the top at the moment. Profit margins are being squeezed because the linerboard industry in China is not doing that well as the Government seeks to manage inflation. The situation is different in Europe where linerboard prices are high, so a small amount of UK waste paper is being traded there now.” According to Briggs, if prices continue to rise, paper merchants will seek to trade in Europe more.

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